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Azure Sun Energy Private Limited (Azure Sun), a wholly owned subsidiary of PE-backed Azure Power India Private Limited, has received $4.6 million (Rs 25.6 crore) from International Finance Corporation (IFC), the private sector investment arm of the World Bank. The funds will have a tenure of 15 years.

The loan amount secures 74 per cent of the estimated project cost of $6.2 million. The project, to deploy solar rooftop technology, will be located in Gandhinagar in Gujarat. The state has granted a 25-year construction and operation concession to the company. The rooftop solar panels will be installed both on government and privately owned buildings, with the former accounting for a share of 80 per cent.

Power generated from this project will be sold to private distribution company, Torrent Power Ltd., at a pre-agreed tariff. Torrent holds electricity distribution license for Gandhinagar and several other cities in Gujarat.

Azure Power, a US-based solar power developer that constructs, owns and operates plants, incorporated its India division in 2008. The Indian arm has a project portfolio of 17 MW of operational power plants, while another 40 MW of capacity is under development. Azure is India’s first private entity to be operational under Jawaharlal Nehru National Solar Mission (JNNSM).

The company has a mix of investors from the promoter, Inderpreet Wadhwa, to PE firms such as Foundation Capital and Helion Ventures, German investment and development company, DEG and multi-lateral agency, IFC.

While series A funding was provided by the PE firms in 2008, series B round of funding in 2010 was by existing PE firms, apart from $10 million by IFC. For IFC, this was the first solar project investment in South Asia under its Cleantech Investment Program. Thereafter, in 2011, the company was provided $13.6 million of funds from DEG through compulsory convertible debentures. The company also raised $16 million from the US Exim Bank for its 5MW solar project in Rajasthan.

In May 2012, the company was expecting $70 million funds flow from US Exim Bank for commissioning the ongoing photovoltaic plant at Nagaur in Rajasthan.

IFC has lent support to several companies in India for the rooftop solar programme, which is in a nascent stage in India, including Husk Energy, Moser Baer Clean Energy and Bhilwara Energy.

Key deals in the sector in the country include the Rs 152 crore investment of Mcap Fund Advisors, TVS Capital and IDFC Private Equity in ReGen Powertech, SBI Macquarie’s investment in Soham Renewable Energy (2011), NSL Renewable Power’s $40 million funding by FE Clean Energy Group (2011), Blackstone’s $300 million investment in Moser Baer (2010) and equity infusion in Husk Power by Acumen Fund (2010). Another expected funding is a part-debt, part equity infusion of $130 million in INOX Renewables by IFC.